Estate Workers: Deprived Working Community In Sri Lanka

With the new government coming into power with a bagful of promises, especially towards the interests of the country’s deprived working community, The Sunday Leader learns that the estate sector salary issues are yet to fall upon the government’s watchful gaze.

Several sources from the plantations sector raised concerns over the deteriorating standards of the sector and said that the government should divert more attention towards investing in the wellbeing of the Sri Lankan estate worker community. According to our sources, without implementing a proper salary raise, the government could not expect higher revenue from the sector.

Even though the estate worker salary hike was proposed sometime back by several parties, according to estate worker unions, insufficient government intervention has resulted in present consequences. They allege that with a proper salary index and mechanism to tackle the requirement, the productivity of the sector will also continue to recline.

The union representatives said that already a large number of the estate sector workers, especially from the age group between 25-40 years, have started leaving the plantations industry and moving towards more urban areas in search of better employments. They warn that at the present rate, the industry would possibly face a labour shortage in the near future.

Further elaborating on the point, the union representatives said that to date, the estate workers have had no proper representation. Therefore, the necessities and the requirements of the estate working community are not being presented in the right context to the decision makers, lamented the union representatives.

The story

It was learnt that even though Minister of Plantation Industries is Navin Dissanayake, the estates comes under the Minister of Public Enterprises Kabir Hashim. The plantation trade unions did demand a daily wage of Rs. 1,000 during the recent parliamentary election campaign. The Planters’ Association which represents the plantation management companies has already pointed out that to increase the daily wage from the present Rs. 620 to Rs. 1000 would be an increase of 62 per cent and that such an increase in one go would be ‘inconceivable’ in any industry. The 22 plantation management companies collectively employ over 180,000 workers, and the daily cost of employing a worker is Rs. 700 with the EPF and ETF. This is without the cost of other commitments such as gratuity, holiday pay, attendance bonuses, etc.

Daily plucking average of a tea estate worker is around 18 kg. In comparison, the daily plucking averages in Kenya is 48 kg and in the Indian tea growing State of Assam it is 28 kg. Even this 18 Kg average in Sri Lanka often drops to 14kg to 12kg during the dry season and in wet weather. The daily plucking average of 18 kg converts to 3.87 kg of made black tea. There are almost as many workers involved in weeding, fertilizing, pruning, and maintaining the estates and in factory work and when all these workers who are involved in the production of tea are taken into account, the output per worker is 2.12 kg of made tea. Thus the labour component in the cost of production of made tea is 67 to 70 per cent. The rest being other inputs including chemicals, material, fertiliser, fuel and on staff.

The tea and rubber markets have been facing the worst crisis in decades due to a collapse in international prices and the large estates have been reporting losses. Wages in the plantation sector tend to be politically determined unlike wages in the rest of the private sector. Prices received at both rubber and tea auctions are now lower than in 2013 when the last wage hike (of 20 per cent) was given to estate workers, indicating that even the present wage is unaffordable to the plantation companies. Speaking to The Sunday Leader, Minister of Plantations Navin Dissanayake said that several discussions have taken between the estate worker trade unions and the Labour Department representatives. However, Minister Dissanayake stated that the matter is being handled by the Labour Ministry and that the Labour Minister has intervened in the matter.

Commenting on the outcome of the discussions, Naveen Dissanayake said that even though the discussions overlooked all the aspects of the agenda, the parties have not yet been able to come to an understanding regarding the matter. According to the Plantations Minister, the Labour Ministry has tabled several proposals, but the trade union representatives have not agreed to them.

Therefore, amidst much melodrama, the tug-of-war discussions between the two parties are going on at present. Speaking on the present status of the plantations sector, the Minister stated that at present, things are neither positive nor negative and that the industry has been able to hold their ground amidst many difficulties, but no significant development could also be noted. Giving out statistics the Minister said the industry has been able to hold the ground in terms of production as well and that they are planning on giving special attention to rubber production.

Highlighting the future expansion plans of the sector, Dissanayake said that the ministry has recognised that the future of the industry lies by making strong sentiments in countries such as Iran, Syria, China, and Russia. In the next two or three months to come, delegations from Sri Lanka are expected to tour among these countries in order to build bilateral ties with them.

Plantations sector

Many observers have massively criticised the lack of enthusiasm towards the industry over time. They speculated that if the plantation workers continue to leave the industry at the current rate; this might as well be curtains for the Sri Lankan plantations sector.

Meanwhile, the Planters’ Association has stated that Regional Plantation Companies (RPCs) have put forward their recommendation for a revenue sharing model for the remuneration of estate workers. This bold initiative is the only sustainable solution and way forward, which would see a drastic change not only in increased incomes through improved productivity, but a radical change in the lifestyles and mindsets of the plantation workers.

With the RPCs incurring a staggering loss of Rs. 4,000 million on tea and rubber last year, the new proposal enables high labour costs to be mitigated by improving worker productivity through performance-related pay, similar to the smallholder model while enabling workers also to earn well beyond their present income. Thus it represents a win-win, especially with an increase in the daily wage with no link to productivity being economically infeasible. Prices received at both rubber and tea auctions are now lower than in 2013 when the last wage hike (of 20%) was given to estate workers, indicating that even the present wage is unaffordable to the plantation companies.

Therefore, based on the proposal, the harvesting operation which is the only revenue generating operation in the estate is to be executed in this manner initially and the harvesters will be paid a predetermined value as already done in the Bought Leaf Formula, based on the prices realised at the Auction. All the other agricultural, agronomic and management practices and inputs, supervision, support services, logistics and the traditional services, facilities and benefits will be continued in the usual manner without any change. In addition, the Employees’ Provident Fund (EPF) and Employee’s Trust Fund (ETF) contributions will be made jointly based on the income earned. Fundamentally, this model is to enhance and to increase the ability and the opportunity for the workers to earn as much as they wish to work for, instead of being confined to a daily wage purely based on attendance.

Following that, an agreement will be signed between each registered worker and the company for six months and each worker shall be allocated to pluck a specific number of tea bushes from all categories/yields. It was learnt that the Revenue Sharing Model is widely used in the plantation industries across the world and even in Sri Lanka it has yielded positive results. The country’s 400,000 tea smallholders, who produce nearly 75 per cent of the nation’s total amount of green leaf, function on a similar basis and have more than doubled the extent of their cultivations between 1992 and 2012 – reflecting the viability, the success and the attractiveness of this model for all the parties involved and in the process have bettered their quality of life as well. Furthermore, Planters’ Association of Ceylon Chairman Roshan Rajadurai while addressing the 161st Planter’s Association AGM referred to the ongoing negotiations on estate sector wages to determine the daily wage of workers employed in the rubber industry by the country’s Regional Plantation Companies (RPCs). He said that NR prices were now lower than what it was when the last wage hike of 20 per cent announced in 2013.

No issues addressed

Speaking on the matter, former Nuwara Eliya District parliamentarian Sri Ranga Jayaratnem said that even though governments have planned to supply the necessary relief for the estate workers, they have failed to do so as yet. Speaking to The Sunday Leader the former parliamentarian said that in whatever scenario, the ministers responsible for the relevant sectors are well taken care of than the working people, who are the workforce behind the sector.

He stressed that the government should invest more time in resolving the issues of the estate sector salaries, and that they should adopt a proper mechanism to provide the required increments when it is due. The former parliamentarian warns that by extending a blind eye to the incident would worsen the current situation of the sector and that it would directly affect the morale of the people on the ground level.

In addition to the above, Jayaratnem said the living condition of the estate workers are far from the standards of normal human beings. Highlighting a few instances, the former parliamentarian said people do not have proper sanitation, which results in the spread of malicious diseases, then the education services being provided are not sufficient, and the penetration level of education institutions in the area not even marginally enough to the regional requirement.

Highlighting another concern, he said the representation of the actual estate working community has become less and because of this, the real issues or the concerns of the estate workers are not brought to attention. By implementing proper representation, the relevant representatives would be able to invent a proper strategy to negotiate with the authorities and derive a proper resolution to the matter.

As the fourth largest exporter of tree in the entire world, the government has to divert more attention towards establishing stability in the sector. By ignoring the need of the hour, the country is avoiding the solution to a concern of much greater magnitude.